Amsterdam becomes hub for small, collaborative agencies

Advertising Age, 12 January 2011

In the fourth wave of international advertising, big isn’t beautiful anymore

As a freelance planner I not only work with many different advertising agencies, I also regularly team up with other freelancers and small, specialized shops to work directly for advertisers. Since I love working in this dynamic way, I was happy to come across an article — written by Robert Röling, a PhD student at the University van Amsterdam — that says that Amsterdam’s international success in attracting both creative talent as well as foreign agencies, is due to the increasing importance of small, flexible, independent agencies. Since Amsterdam has so many of these agencies, it is now the place to be.

The article describes the history of international advertising in four big waves. The first wave started in the 1920s, when the industrial revolution gave American advertising an enormous boost. It was when Madison Avenue became the epicenter of international advertising and agencies like JWT, DDB, and Ogilvy quickly expanded their businesses – also overseas. The second wave dates from the 60s, when a new creative élan made London and Paris the place to be. In these cities, hard selling changed into soft selling, to persuade consumers in more friendly ways. Agencies like Saatchi, Lowe, Publicis, and TBWA obtained global roles. The third wave emerged in the 80s when diversity in both products and consumer behavior forced agencies to become smaller and more flexible. Bartle Bogle Hegarty, Crispin, Porter + Bogusky, and Wieden & Kennedy entered the international arena.

Today we’ve reached the fourth wave of international advertising. According to Röling, this fourth wave is basically a continuation of the process of deconsolidation that started in the 80s. What makes it different though, is that the internet so radically changed both the media landscape and the role of the consumer. And because advertising has become so complex, the agencies have less and less knowledge in-house to create multi-disciplinary campaigns. The more dynamic agencies that work with several external specialized parties thus form the new standard.

After reading this article, I realized that several new names with a collaborative agency model opened their doors in 2010. Collaboration is not new of course, but these agencies explicitly present their selves as a small team of ad professionals, working with a varying team of external (freelance) specialists – each mastering a different part of the wide advertising spectrum. In other words, these agencies don’t pretend to be bigger than they are.

One of the first agencies in Amsterdam to embrace this model was 60 layers of cake. It was founded in 2006 by Rodger Beekman. In the beginning, the agency found it difficult to sell its proposition, but when Beekman read We Think by Charles Leadbeater, on collaborative creativity, he knew he was on the right track. About the advantages over the big network agencies, Beekman says: “The funny thing is that big network agencies always try to present their selves as one-stop-shops, while they really aren’t. They are a group of different agencies with different specialties that might share the same building, but in the end often see each other as competitors. That doesn’t sound like collaborative creativity to us. Our model genuinely offers a one-stop-shop.”

Recently two agencies with similar models opened their doors in Amsterdam; One Big Agency and The Big Mix. The fact that both agencies use ‘Big’ in their names illustrates the paradox of collaborative creativity; you don’t need many employees to be a big agency anymore. Harry Kramp and Wouter Kiewit de Jonge are The Big Mix. Kramp, a highly respected copywriter with over 40 years of experience, worked at JWT Amsterdam (and its predecessor) the most part of his life. When I asked Kramp what motivated him to make this radical switch, he answered: “Clients are not willing to pay the exorbitant fees anymore that the traditional agencies need to charge to support their incredible overhead. Their business model is outdated. That’s why we intend to stay lean and mean. And since we understand advertising and know a big network of specialists, we only hire specific external talent when needed”.

But it takes two to tango. It’s not just the agencies becoming more flexible; the clients have become savvier and pickier, because they use today’s market transparency to find the best deal, both in quality and price – just like the consumer does. And that might prove to be the most serious threat for the agencies that need to support too many employees that aren’t always making money.

As in any market, there will always be Keynesian cycles that make advertising agencies grow and shrink, but the fourth wave of international advertising might just be strong enough to permanently change the agency model, as we’ve known it since Madison Avenue more or less invented it. It won’t be about how big you are anymore; it will be about how efficiently you collaborate with others.